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State Farm agrees to pay $100 million over Hurricane Katrina claims

US Hurricanes-Most Intense
David J. Phillip
AP file
In this Aug. 30, 2005, file photo, floodwaters from Hurricane Katrina part of New Orleans. The most destructive storm in U.S. history and also one of the deadliest, Katrina was a Category 3 storm with estimated maximum winds of 125 mph when it made landfall near Buras, La.

A State Farm subsidiary has agreed to pay $100 million in restitution over its alleged mismanagement of flood insurance claims after Hurricane Katrina nearly two decades ago.

According to the Associated Press, State Farm Fire and Casualty Co. agreed to pay the restitution to the federal government, not to policyholders.

The agreement stems from a lawsuit filed by sisters Cory and Kerri Rigsby. The insurance adjusters, who were independent contractors for Bloomington-based State Farm, claimed the insurer avoided paying wind damage claims tied to the 2005 disaster by shifting them to the federal flood insurance program.

The Rigsbys won their case in 2013. The U.S. Supreme Court upheld the verdict in 2016.

State Farm has agreed to dismiss counterclaims against the Rigsby sisters for allegedly taking company documents.

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Eric Stock is the News Director at WGLT. You can contact Eric at ejstoc1@ilstu.edu.
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